The World
More than 6.6 million people filed new claims for unemployment benefits last week, the Labor Department said Thursday, setting a grim record for the second straight week. The latest claims brought the two-week total to nearly 10 million. The speed and scale of the job losses is without precedent. Until last month, the worst week for unemployment filings was 695,000 in 1982. “What usually takes months or quarters to happen in a recession is happening in a matter of weeks,” said Michelle Meyer, chief U.S. economist for Bank of America Merrill Lynch. (New York Times)
China has concealed the extent of the coronavirus outbreak in its country, under-reporting both total cases and deaths it’s suffered from the disease, the U.S. intelligence community concluded in a classified report to the White House, according to three U.S. officials. The officials asked not to be identified because the report is secret, and they declined to detail its contents. But the thrust, they said, is that China’s public reporting on cases and deaths is intentionally incomplete. Two of the officials said the report concludes that China’s numbers are fake. (Bloomberg)
Oil surged more than 12% as China planned to start buying up cheap crude for its strategic reserves, adding to tentative signs of growing risk appetite across financial markets that’s propelling prices higher. Futures extended gains as Beijing instructed government agencies to start filling state stockpiles after oil plunged 66% over the first three months of the year. Saudi Arabia, the world’s biggest oil exporter, plans to boost daily production this month to more than 12 million barrels after increasing output in March to a one-year high. U.S. President Donald Trump will meet the country’s oil executives Friday following his attempts to broker a truce in the price war. (World Oil)
Oil companies are turning to rail cars to stash the crude they can’t sell, as the world runs out of places to store a growing glut of cheap barrels. North American producers, refiners and traders are now looking to store excess oil in rail yards in Texas, Saskatchewan and Manitoba amid the crude market’s historic plunge and collapsing demand, according to people familiar with the matter. (World Oil)
Germany is in talks to provide Lufthansa with billions of euros in state aid and could take a stake in the airline, which has grounded more than 90% of its fleet due to the coronavirus pandemic. (Reuters)
British Airways is expected to announce it will suspend up to 36,000 staff, from cabin crew to ground staff, engineers and head office employees, because of the coronavirus pandemic. (The Guardian)
India is on the verge of an unprecedented economic catastrophe as the humanitarian disaster from the Covid-19 pandemic unfolds.The disruption is much starker than the global financial crisis of 2008, which hit the Indian financial sector and real demand, but did not bring production to a halt. Besides, at the time, the Indian economy was much better placed to handle the crisis, as it had been growing rapidly in the years leading up to 2008. (Quartz)
France’s jobless total jumps to 4m. (Financial Times)
In a joint statement, the UN (FAO), World Health Organization, and World Trade Organization warned of food trade and market disruptions: “When acting to protect the health and well-being of their citizens, countries should ensure that any trade-related measures do not disrupt the food supply chain. Uncertainty about food availability can spark a wave of export restrictions, creating a shortage on the global market. Such reactions can alter the balance between food supply and demand, resulting in price spikes and increased price volatility. We learned from previous crises that such measures are particularly damaging for low-income, food-deficit countries and to the efforts of humanitarian organizations to procure food for those in desperate need.” (UN)
The UN's COP 26 climate change summit due to take place in the Scottish city of Glasgow in November has been postponed due to the coronavirus pandemic. (France24)
Senate Majority Leader Mitch McConnell (R-Ky.) said he would move slowly on considering any follow-up legislation and would ignore the latest efforts by House Speaker Nancy Pelosi (D-Calif.) to jump-start talks. McConnell’s sweeping dismissal of Pelosi’s urgent call for action underscored the uncertainty and fierce political warfare in Congress as the coronavirus outbreak shuts down much of the nation and throttles the economy, with little consensus on what should follow the biggest rescue package in U.S. history and lingering tensions from those negotiations between McConnell and Pelosi. “She needs to stand down on the notion that we’re going to go along with taking advantage of the crisis to do things that are unrelated to the crisis,” McConnell said in an interview with The Washington Post, calling the speaker’s recent comments about a fourth round of virus-related legislation “premature.” (Washington Post)
The Treasury Department plans to hire three Wall Street banks for advice on doling out tens of billions of dollars in aid to the airline industry, which is hemorrhaging cash as a result of the coronavirus pandemic. The department is expected to tap PJT Partners Inc., Moelis & Co. and Perella Weinberg Partners for help with the airline portion of the $2 trillion stimulus bill, according to people familiar with the matter. Each bank is likely to advise on aid to one of three subsectors: commercial airlines, cargo carriers and firms critical to national security. (Wall Street Journal)
AHA seeks $25K per hospital bed from emergency COVID-19 fund: The American Hospital Association suggested using Medicare Administrative Contractors to give every hospital in the country $25,000 per bed, with those in hot spots receiving a rate of $30,000. That base amount would add up to about $23 billion of the $100 billion from the legislation. (Healthcare Dive)
The Trump administration has decided against reopening Obamacare enrollment to uninsured Americans during the coronavirus pandemic, defying calls from health insurers and Democrats to create a special sign-up window amid the health crisis. (Politico)
Nearly two dozen space-related Air Force units will be transferred to the Space Force over the next three to six months, a major move in building up the new service. (National Defense Magazine)
Seven of Wisconsin’s largest farm groups have asked the U.S. Department of Agriculture to use its extensive purchasing power to buy large amounts of dry milk, butter and cheese that normally would be going to restaurants and the food-service industry. This week some large Wisconsin dairy operations have begun dumping milk because there is no buyer for it. (Milwaukee Journal Sentinel)
More than a third of the country’s vegetables and two-thirds of its fruits and nuts are grown in California. Shelter-in-place orders in California exempt the estimated 420,000 farmworkers as essential employees. But many are undocumented, lack health insurance and don’t qualify for unemployment insurance or federal COVID-19 relief. And as one farmworker advocate says, “You can’t pick strawberries over Zoom.” (Los Angeles Times)
Finance
China’s venture capitalists start making deals, amid signs of recovery.In China, Perfect Diary, a four-year-old online makeup retailer selling items like brightly hued lip gloss and eyeliner, has been thriving. Perfect Diary’s sales grew 250% in both January and February compared to sales a year ago, according to people who have direct knowledge of the company’s performance. Earlier this month, Tiger Global Management led Chinese private equity firms Hopu Management Investments and Boyu Capital in a $100 million investment in the startup. The fundraising valued the company at $2 billion, doubling its previous valuation from last September when it most recently raised money, according to people with direct knowledge of the deal. (The Information)
Private equity and venture capital investors now have high-powered bipartisan support for their efforts to expand the types of small businesses eligible for $350 billion in federal loans via the CARES Act. House Speaker Nancy Pelosi and House Minority Leader Kevin McCarthy, who rarely agree on anything except for the grandeur of California, both want the so-called "affiliation rules" waived. Affiliation rules also expand to many VC-backed companies, even if there is no outside investor control, such as if two or more VC firms combined "are large compared to other stock holdings." (Axios)
U.S. manufacturing activity contracted less than expected in March, but disruptions caused by the coronavirus pandemic pushed new orders received by factories to an 11-year low. Data on Wednesday showed private payrolls dropped last month for the first time in 2-1/2 years as businesses shut down in compliance with strict measures to contain the highly contagious virus. (Reuters)
The Federal Reserve on Wednesday eased rules around how banks account for their supersafe assets, a move meant to boost the flow of credit to cash-strapped consumers and businesses during the coronavirus slowdown. The Fed said it would exclude for one-year Treasurys and deposits held at the central bank from banks’ supplementary leverage ratio calculation. The ratio measures capital—funds that banks raise from investors, earn through profits and use to absorb losses—as a percentage of loans and other assets. Big U.S. banks must maintain capital equal to at least 3% of all of their assets, including loans, investments and real estate. (Wall Street Journal)
A day before small businesses can apply for forgivable loans from the $2 trillion financial relief package, banks say they are still struggling to understand how to make these loans eligible for a government guarantee. (Wall Street Journal)
Many of the world's poor and developing countries could begin defaulting on their bonds in the coming weeks as the coronavirus outbreak has led to massive outflows from emerging market assets and real-world dollars being yanked from their coffers. Investors pulled a record-breaking $83.3 billion from EM securities in March, dwarfing outflows seen during previous "stress events" like the global financial crisis, the 2014 taper tantrum, and China's devaluation scare of 2015, the Institute of International Finance says. (Axios)
Pension programs have taken huge hits to their investment portfolios over the past month as the markets collapsed. Last week, Moody’s investors service estimated that state and local pension funds had lost $1 trillion in the market sell-off that began in February. The exact damage is hard to determine, though, because pension funds do not issue quarterly reports. “You’re not going to see real data on the market crash until Christmas,” said Girard Miller, a former chief investment officer of the Orange County, Calif., pension fund and a former member of the Governmental Accounting Standards Board. (New York Times)
Technology
Start-Ups are pummeled in the ‘Great Unwinding.’ Dozens have laid off thousands, slashed costs and changed their businesses to try to survive the pandemic. (The New York Times)
YouTube is planning to release a rival to TikTok, the hugely popular video-sharing app, by the end of the year, according to two people familiar with the matter. YouTube is currently planning Shorts, its answer to TikTok, as a feature inside its existing mobile app. Shorts will include a feed of brief videos posted by users inside the Google-owned app and will take advantage of the video service’s catalog of licensed music, songs from which will be available to use as soundtracks for the videos created by users, said the people. The move represents the most serious effort yet by a Silicon Valley tech company to combat the rise of TikTok, a rare example of a Chinese-owned social media app that has become a global hit. (The Information)
A feature on Zoom secretly displayed data from people’s LinkedIn profiles. After an inquiry from Times reporters, Zoom said it would disable a data-mining feature that could be used to snoop on participants during meetings without their knowledge. Meanwhile, Zoom has cancelled all work on new featuresand will instead focus on its security and privacy. And now, Elon Musk’s rocket company SpaceX has banned its employees from using video conferencing app Zoom, citing “significant privacy and security concerns,” according to a memo seen by Reuters, days after U.S. law enforcement warned users about the security of the popular app. (New York Times, The Independent & Reuters)
Zoom’s daily users ballooned to more than 200 million in March from a previous maximum total of 10 million, the video conferencing app’s boss Eric Yuan said on Wednesday. "To put this growth in context, as of the end of December last year, the maximum number of daily meeting participants, both free and paid, conducted on Zoom was approximately 10 million," founder and Chief Executive Officer Eric Yuan wrote in a letter to Zoom users. (Reuters)
Airbnb plans to halt all of its marketing, pause most hiring, and likely withhold employee bonuses as it tries to conserve cash amid a slide in bookings. Amazon and Walmart have temporarily suspended commerce marketing deals with digital media firms such as BuzzFeed, two people familiar with the situation said. (The Information & The Information)
A new blood test detected more than 50 types of cancer as well as their location within the body with a high degree of accuracy, according to an international team of researchers led by Dana-Farber Cancer Institute, a Harvard affiliate, and the Mayo Clinic. (Harvard Gazette)
Smart Links
SoftBank Won’t Buy $3 Billion in WeWork Stock. (New York Times)
2020 Democratic Convention pushed back to the week of Aug. 17. (Milwaukee Journal Sentinel)
The University of California ease some admission requirements by eliminating SAT test scores and letter grades for required courses during the coronavirus crisis. (Los Angeles Times)
Hulu’s founding CEO Jason Kilar has been named CEO of WarnerMedia. (Deadline)
Business Executives Offer Large Donations to Fight Covid-19. (Barron’s)